David Wessel

Washington, D.C.

Contributor at The Wall Street Journal

Director, Hutchins Center at Brookings Institution

Director, Hutchins Center on Fiscal & Monetary Policy, Brookings. My latest book "Only the Rich Can Play," the story of Opportunity Zones.

Articles

What’s happening with Opportunity Zones in the reconciliation bill?

2 weeks ago | brookings.edu | David Wessel

Opportunity Zones (OZs), created by the 2017 Tax Cuts and Jobs Act, offers generous tax incentives for private investors who put money into any of 8,764 census tracts across the U.S., nearly all of them low-income communities. “Their purpose,” as the Internal Revenue Service puts it, “is to spur economic growth and job creation in low-income communities while providing benefits to investors.” The reconciliation bill pending in the House in 2025 would renew and tweak the OZ program.
What are budget baselines, and what do they have to do with reconciliation in Congress?

1 month ago | brookings.edu | Tristan Loa |David Wessel

What is a budget baseline? A budget baseline is a projection of federal spending, revenues, deficits or surpluses, and debt, based on assumptions about the economy and trends in spending and revenues. Congress relies on baselines, often looking out ten years, produced by the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT). This post explains the importance of baselines to the congressional budget process. How do current law and current policy baselines differ?
How does the Federal Reserve affect the Treasury market?

1 month ago | brookings.edu | Janice Eberly |Anil Kashyap |Jón Steinsson |David Wessel

At around $900 billion in transactions daily, the market for U.S. Treasuries is massive, not only in terms of quantity but also in terms of importance to the U.S. and global economies. The Treasury market is tied to interest rates, the value of the dollar, and financial markets around the world. So when shocks hit the Treasury market, as they did during the COVID-19 crisis, the ripple effects can be global.
What is the status of Russia’s frozen sovereign assets?

1 month ago | brookings.edu | Alexander N. Conner |David Wessel

After the Russian invasion of Ukraine in February 2022, the U.S. and its allies responded with an economic toolkit designed to strengthen Ukraine and diminish Russia’s war-making capacity. Among the most potent of these tools was to freeze Russia’s foreign exchange reserves and use them as the basis for a large-scale loan to Ukraine. As the Trump administration pursues negotiations without America’s allies, the future of this economic toolkit is highly uncertain.
Closing the racial gap in economic and social power

1 month ago | brookings.edu | Andre Perry |David Wessel |Fred Dews

... just as we can start these bad policies at the local levels, we can create inclusive policies at the local level. So that’s part of what the book does. It says here are people actually doing something to change the outcomes of Black people and communities. Andre Perry Historically, Black Americans’ quest for power has been seen as an attempt to gain equal protection under the law, but power in America requires more than basic democratic freedoms.
Why is the Federal Reserve independent, and what does that mean in practice?

2 months ago | brookings.edu | David Wessel

What does “independence” mean? The Federal Reserve was created by an act of Congress in 1913 and, since 1977, has been charged with promoting maximum employment and stable prices. In practice, independence means that the Fed can set interest rates without interference from Congress or the White House even if politicians aren’t unhappy with Fed policy—and say so publicly. Congress could, of course, change the law, but no bill to alter the Fed’s mandate or governance has gone very far.
The Paradox of Trump’s Economic Weapon

Mar 6, 2025 | foreignaffairs.com | Nicholas Mulder |Michael Albertus |Matthew J. Slaughter |David Wessel

Since returning to the White House, U.S. President Donald Trump has unleashed a whirlwind of policy shifts, territorial claims, and economic threats. In his first few weeks in office, Trump has expressed a desire to bring Canada, Greenland, the Panama Canal, and the Gaza Strip under direct American control. He has also expanded his trade offensive against China to include Canada and Mexico, the United States’ two largest trading partners.
The Broken Economic Order

Feb 25, 2025 | foreignaffairs.com | Mariana Mazzucato |Jason Furman |Matthew J. Slaughter |David Wessel

In many ways, Donald Trump’s election to a second term as U.S. president is a story of economic dissatisfaction. For the first time in decades, the Democratic candidate received more support from the richest Americans than from the poorest. In 2020, most voters from households earning less than $50,000 a year opted for the Democrat, Joe Biden; in 2024, they favored the Republican, Trump. Those making more than $100,000 a year, meanwhile, were more likely to vote for Kamala Harris than for Trump.
Productivity Is Everything

Feb 25, 2025 | foreignaffairs.com | Matthew J. Slaughter |David Wessel |Jason Furman |Amy Pope

For the United States, these are trying times. Americans are overcome with an unshakable sense of economic malaise. The top-line indicators are good: unemployment is low, inflation is declining, and the country remains the richest in the world. Yet in poll after poll, most Americans say they are unhappy with the state of the economy today and its prospects for tomorrow. Only a quarter consider the economy good or excellent.
What is reconciliation in Congress?

Jan 13, 2025 | brookings.edu | David Wessel

With 53 Republicans and 47 Democrats (or Democratic-caucusing independents) in the Senate in the 119th Congress—and Republicans therefore shy of the 60 votes needed to avoid a filibuster—there is attention to a legislative process for getting tax and spending bills through the Senate known as reconciliation. Here’s what it is and how it works. When and why does Congress use reconciliation?